API takes £2.6m hit in China
MANCHESTER packaging foil business API Group expects to take a £2.6m hit on its joint venture in China.
Following a strategic review at the 51%-owned subsidiary the business is taking a non-cash impairment charge against fixed assets.
API said the venture has enjoyed higher volumes but it has only made “limited progress” in curbing losses.
However, overall the group said it expects to report an operating profit when it unveils full-year figures next month. In a trading update API said its performance has recovered after a “difficult” first half.
Group sales in the second half grew by around 10% compared to the previous six months. Profitability in its European operations also recovered.
API said it continues to operate “well within” its main banking covenants. Last month it completed a new, $7.6m asset-backed lending facility in the US. Part of the proceeds will be used to pay down higher interest rate debt in the UK and to re-balance gearing across the group’s global operations, said API.
